Listing’s Good: LG India’s 50% surge a D-St record

Mumbai: LG Electronics India, the domestic arm of the Korea-headquartered LG Electronics, had a blockbuster listing on Tuesday with the stock gaining 50% on its debut over its IPO price.

The stock listed at Rs 1,710, over its IPO price of Rs 1,140.The strong gain in the stock price gave LG Electronics India a market capitalisation of nearly $13 billion, 40% more than its parent’s $7.8 billion valuation, Bloomberg data showed. This made LG Electronics India one of the handful of companies that have market valuation greater than their overseas parent. Maruti Suzuki is one of those companies.On Oct 9, LG Electronics India closed one of the most successful IPOs in Indian history, garnering nearly Rs 4.4 lakh crore in demand for its shares compared to Rs 11,607 crore worth of shares which were on offer.

The IPO was subscribed 54 times. This was the second biggest amount ever collected in any IPO in India ever.Nearly 10.2 crore shares were offered in the IPO which was a 100% offer for sale by its Korean parent. In the IPO, the shares were offered at a price band of Rs 1,080 – Rs 1,140.On Tuesday on BSE, the stock opened for trading at Rs 1,710 and closed slightly off that mark at Rs 1,689, up 48%. On the NSE, nearly 6.9 crore shares changed hands while on BSE another 78.6 lakh shares were traded.

As LG Electronics India was listed, a host of brokerages initiated their coverage of the stock. Domestic financial services major Motilal Oswal Financial Services has a target of Rs 1,800, while ICICI Securities has put the target price at Rs 1,700, Emkay Global at Rs 2,050, Antique Broking at Rs 1,725, Prabhudas Liladher at Rs 1,780, Equirus Capital at Rs 1,705, Ambit Capital at Rs 1,820 and Nomura at Rs 1,800.LG Electronics India’s was the second billion-dollar-plus IPO during the last week, a rare event in India.

The Rs 15,512-crore IPO for Tata Capital was the first one that opened on Oct 6 and closed on Oct 8. The issue was subscribed two times.The LG India IPO also broke a nearly 15-year old jinx for billion-dollar IPOs that showed muted listing. In Nov 2015, Coal India that closed its Rs 15,500-crore IPO the previous month, was listed with a 48% premium. Since then, the billion-dollar IPOs had muted listing, mostly with single-digit percentage gains.